Everything You Need to Know About the Refundable Accommodation Deposit

Everything You Need to Know About the Refundable Accommodation Deposit

When you or an ageing loved one is moving to an aged care home in Australia, you should take note that there are a number of ways to pay for your stay in such a facility. One of them is the refundable accommodation deposit or RAD. Basically, this is described as a lump sum you pay as a deposit when you admit yourself to a care residence, and the balance of which will be fully refunded when you leave the facility. While this sounds very enticing, it is still best to assess this option before using it. Know whether or not it is the best option for your situation.

What Is the RAD

The refundable accommodation deposit is the payment you make for the full cost of your accommodation in an aged care facility. In a way, this form of payment works like a loan that is free of interest by the facility. According to the law, choosing this payment method within 28 days of your admittance will allow you six months to pay the lump sum amount.

As for the balance of the deposit, it will be refunded when you leave the facility. Additional deductions can be made based on certain amounts you and the centre agreed to be taken out. These can include care fees and other extra services. Take note that these agreements should be put in writing as you acquire them for proof documentation.

Historically, RAD replaced the Accommodation Bond, which is a similar payment method used by aged care facilities across Australia.

Funding RAD

Determining how much you are going to pay can be as easy as using the RAD calculator aged care homes in the country usually use. Of course, the amount also varies depending on the facility you are entering. Regardless of the way you determine the cost, you have to figure out a way to pay for it.

Now, the most common means to cover for RAD aged care is using your savings. However, if you do not have enough left in your bank account, you still have other available options.

For one, if no one will be occupying the house of your ageing loved one when they move to an aged care facility, then you can use it to pay for the RAD. You can decide to sell it and use the money for such a purpose. Or, if you do not want to lose your property, you can choose to rent it out and use your earnings, instead.

Primary Benefit of Using RAD

Like other methods of payment for aged care, there are also advantages to using a RAD. Most of all, the amounts put in it will not be deemed as an asset, which means significant pension and tax benefits on your end. However, it also comes with its own set of drawbacks, so it is still important to weigh the pros and cons first before deciding.


Most importantly, you should seek financial advice from the experts before you make your final decision. After you have determined whether or not the refundable accommodation deposit is the best payment method for your situation, then it is time to find the best aged care facility in Australia for you or your elderly. On that note, you can visit https://arcare.com.au/rad-information/.